1. What is the Mortgage Loan Comparison Calculator?

The Mortgage Loan Comparison Calculator helps you determine the total cost of a mortgage by calculating the sum of all payments plus closing costs. This allows for easy comparison between different loan options.

2. How Does the Calculator Work?

The calculator uses the mortgage cost formula:

Where:

• \( PMT \) — Monthly payment amount (USD)
• \( n \) — Loan term in months
• \( Fees \) — Closing costs and other fees (USD)

Explanation: The equation calculates the sum of all monthly payments over the life of the loan plus any upfront fees.

3. Importance of Total Cost Calculation

Details: Understanding the total cost of a mortgage helps borrowers compare different loan options beyond just the monthly payment amount. It reveals the true cost of borrowing.

4. Using the Calculator

Tips: Enter your monthly payment amount, loan term in months, and any closing costs. For accurate comparisons, ensure all values reflect the same loan amount and property price.

5. Frequently Asked Questions (FAQ)

Q1: Should I choose the loan with the lowest total cost?
A: Not necessarily. While total cost is important, also consider your monthly budget, interest rate type (fixed vs adjustable), and loan features.

Q2: What fees should be included in the calculation?
A: Include all closing costs: origination fees, points, appraisal fees, title insurance, and other lender charges.

Q3: Does this account for tax deductions?
A: No, this is a pre-tax calculation. Mortgage interest may be tax-deductible depending on your situation.

Q4: Should I include property taxes and insurance?
A: Only if they're included in your monthly payment (PITI). Otherwise, consider them as separate ongoing costs.

Q5: How does refinancing affect total cost?
A: Refinancing adds new closing costs but may reduce monthly payments. Calculate the break-even point to see if it makes financial sense.